Observations by an academic researcher on the use of “open”-ness as a competitive strategy, with a particular interest in coping with the commoditization of information goods and technologies in an Internet-enabled world.

Sunday, April 18, 2010

Scott McNealy, co-founder and CEO of Sun Microsystems (1984-2006), in an interview with Fortune magazine:

His conditions for starting another company: “It must be private, never go public. There will be no upside investors other than me and the employees. I will have enough of the voting shares – meaning more than half – so that the board will be hand-picked buddies that I know are smart. Nepotism will not be a bug but a feature, this will be a family owned and family-run organization. It also has to be cash-flow positive from day-one.

“I hope we can pull it off under those condition because I would be thrilled to lead another group of smart engineers, without all the crap that goes into running a company today. I just don’t want Congress telling me how much I should be paid or firing me. I want to pretend I am back in the 1980s again.”

He also describes a partnering rubric that all of us in industry intuitively know but never articulated so clearly:

Finding the right partners: “My gaming theory [sic] strategy says you can almost never partner with the leader. The leader has not interest in justifying or partnering with a smart, young, hot company. So it’s mankind versus Goliath. You go after No. 2,3,4 or 5. You team up to beat Google, beat IBM or Microsoft or Oracle or whatever. Everyone can coalesce around that, and they will partner with you because they think you will be collateral damage. We were going to be collateral damage every year at Sun, that’s why it was easy to partner.”